Everi Holdings announced today that it has acquired historical horse racing (HHR) developer and manufacturer Intuicode Gaming. The deal is for a total consideration of between $22 million to $27 million.
Everi, a Las Vegas-based gaming manufacturer that produces slot machines and is heavily invested in financial solutions for the US gaming industry, says it will initially pay $12.5 million to assume ownership of Intuicode. Everi will complete two additional payments based on future revenue. Those payments, due in 2023 and 2024, are expected to take the total acquisition cost to $22 million to $27 million.
This acquisition is a significant opportunity that brings substantial HHR knowledge and game development expertise to Everi that we expect will help expedite the development and commercialization of our extensive library of content into the HHR market and favorably position us for future growth,” said Everi Holdings Executive VP Dean Ehrlich.
Intuicode, a privately owned gaming firm based in Boynton Beach, Fl., disclosed 2021 revenue of approximately $10 million. The company generates its income from selling and placing its HHR machines and cabinets at licensed locations throughout the US.
Everi added that Intuicode employees will transition to its firm in the coming weeks.
Historical horse racing machines look and sound similar to slots found in Las Vegas. But the outcome of the spinning reels is not based on random number generators, as is the case with slots. Instead, HHR games use previously run horse races and pari-mutuel odds to determine whether a bet wins or loses.
HHR circumvents some state gambling laws in that the terminals are considered pari-mutuel wagering. The machines have helped revitalize the dying horse racing industry across the US.
Historical racing devices are legal in at least five states — Kentucky, New Hampshire, Oregon, Virginia, and Wyoming.
Their spread has had a considerable impact in Virginia, where HHR was legalized in early 2018. Lawmakers in Virginia, long an anti-gambling state, opted to permit HHR devices in exchange for a group of investors agreeing to reopen the Colonial Downs Racetrack.
Chicago-based Revolutionary Racing, which heavily backed the Colonial Downs deal that was dependent on HHR, has since opened several HHR gaming parlors across the commonwealth.
Everi M&A Activity
Everi acquiring Intuicode is only the latest acquisition for the gaming manufacturer. In February, the company announced it was spending more than $30.4 million to purchase Ecash Holdings.
Ecash, also a privately owned company, but based in Australia, is a fintech firm with business operations in Australia, Asia, Europe, and the US.
The Ecash deal came just a month after Everi revealed it would purchase select assets from Atlas Gaming, another Australian-based company. The financial details of that deal were not disclosed. Atlas develops and manufactures gaming software.
Investors liked the Everi news regarding Intuicode, as shares climbed almost 1% today to $18.09. Truist Securities gaming analyst Barry Jonas says the Intuicode deal is relatively inexpensive, and better positions the company to expand its product showcase into HHR.
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